Scribd Logo
Upload

Welcome to Scribd!

  • The Raattama Corporation Had Sales of 3 5 Million Last Year and

    Uploaded by

    Amit Pandey
    49 views1 page
    The Raattama Corporation had $3.5 million in sales last year and earned a 5% return after taxes. They have fallen behind on accounts payable, which represent 60 days of purchases instead of the standard 30 days. The treasurer is seeking bank financing to become current on trade obligations and pay off past due accounts payable. The balance sheet provides assets and liabilities, and there are calculations to determine the amount of needed financing and loan terms.

    Original Description:

    upload

    Original Title

    The Raattama Corporation Had Sales of 3 5 Million Last Year And

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The Raattama Corporation had $3.5 million in sales last year and earned a 5% return after taxes. They have fallen behind on accounts payable, which represent 60 days of purchases instead of the standard 30 days. The treasurer is seeking bank financing to become current on trade obligations and pay off past due accounts payable. The balance sheet provides assets and liabilities, and there are calculations to determine the amount of needed financing and loan terms.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    49 views1 page

    The Raattama Corporation Had Sales of 3 5 Million Last Year and

    Uploaded by

    Amit Pandey
    The Raattama Corporation had $3.5 million in sales last year and earned a 5% return after taxes. They have fallen behind on accounts payable, which represent 60 days of purchases instead of the standard 30 days. The treasurer is seeking bank financing to become current on trade obligations and pay off past due accounts payable. The balance sheet provides assets and liabilities, and there are calculations to determine the amount of needed financing and loan terms.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 1

    Solved: The Raattama Corporation had sales of 3 5 million

    last year and

    The Raattama Corporation had sales of $3.5 million last year, and it earned a 5% return (after
    taxes) on sales. Recently, the company has fallen behind in its accounts payable. Although its
    terms of purchase are net 30 days, its accounts payable represent 60 days’ purchases. The
    company’s treasurer is seeking to increase bank borrowings in order to become current in
    meeting its trade obligations (that is, to have 30 days’ payables outstanding). The company’s
    balance sheet is as follows (in thousands of dollars):

    a. How much bank financing is needed to eliminate the past-due accounts payable?
    b. Assume that the bank will lend the firm the amount calculated in part a. The terms of the loan
    offered are 8%, simple interest, and the bank uses a 360-day year for the interest calculation.
    What is the interest charge for one month? (Assume there are 30 days in a month.)
    c. Now ignore part b and assume that the bank will lend the firm the amount calculated in part a.
    The terms of the loan are 7.5%, add-on interest, to be repaid in 12 monthly installments.
    1. What is the total loan amount?
    2. What are the monthly installments?
    3. What is the APR of the loan?
    4. What is the effective rate of the loan?
    d. Would you, as a bank loan officer, make this loan? Why or whynot?

    The Raattama Corporation had sales of 3 5 million last year and

    ANSWER
    https://solvedquest.com/the-raattama-corporation-had-sales-of-3-5-million-last-year-and/

    Reach out to freelance2040@yahoo.com for enquiry.


    Powered by TCPDF (www.tcpdf.org)

    You might also like